The Daily Parker

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American vs. Orbitz: Who's going to win?

Cranky Flier has his hypothesis:

From everything I understand, this particular spat is really about economics and there’s not some underlying hidden issue. While published commissions have disappeared, agencies with heft like Orbitz still do get paid by airlines. They also get paid by the reservation systems they use. How does the reservation system get the money to pay them? They make the airlines cough it up. So really when someone books on an online travel agent site, the airlines are paying for it twice. The airlines have to look at the total amount and decide whether or not its worth the price to play.

Now, if you’re a traveler and you go to Orbitz, you aren’t going to see American or Southwest. ... Sure, United and Delta can pick up some of the slack, but Orbitz becomes significantly less useful domestically. International is a different story, I suppose. That being said, if you really love using an online travel agent, then why not just use Expedia now? There is real risk for Orbitz.

There is also real risk for American, but it’s less than it probably would have been in the past. Before consolidation took hold, there were so many airlines out there you might not notice, as a consumer, that American had disappeared. But now, you’ll notice. At the same time, American has upped the percentage of traffic coming direct, so Orbitz really feels more pressure now than it would have in the past. The balance of power has shifted.

As a loyal oneworld frequent flier, I almost always go to directly (though I sometimes follow up by checking Hipmunk when I see suspicious direct pricing). But for occasional passengers, the Orbitz is a useful resource. And if Orbitz no longer shows American Airlines prices, will United and Delta raise theirs?

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